Ameriprise 2011 Annual Report Download - page 178

The Annuities segment provides variable and fixed annuity products of RiverSource Life companies to retail clients. Prior to
the fourth quarter of 2010, the Company’s variable annuity products were provided through both affiliated and unaffiliated
advisors through third-party distribution. During the fourth quarter of 2010, the Company discontinued new sales of its
variable annuities in non-Ameriprise channels to further strengthen the risk and return characteristics of the business. The
Company’s fixed annuity products are provided through affiliated advisors as well as unaffiliated advisors through third-party
distribution. Revenues for the Company’s variable annuity products are primarily earned as fees based on underlying
account balances, which are impacted by both market movements and net asset flows. Revenues for the Company’s fixed
annuity products are primarily earned as net investment income on invested assets supporting fixed account balances, with
profitability significantly impacted by the spread between net investment income earned and interest credited on the fixed
account balances. The Company also earns net investment income on invested assets supporting reserves for immediate
annuities and for certain guaranteed benefits offered with variable annuities and on capital supporting the business.
Intersegment revenues for this segment reflect fees paid by the Asset Management segment for marketing support and
other services provided in connection with the availability of RiverSource Variable Series Trust, Columbia Funds Variable
Insurance Trust, Columbia Funds Variable Insurance Trust I and Wanger Advisors Trust funds under the variable annuity
contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice &
Wealth Management segment, as well as expenses for investment management services provided by the Asset
Management segment.
The Protection segment offers a variety of protection products to address the protection and risk management needs of
the Company’s retail clients including life, DI and property-casualty insurance. Life and DI products are primarily provided
through the Company’s affiliated advisors. The Company’s property-casualty products are provided direct, primarily through
affinity relationships. The Company issues insurance policies through its life insurance subsidiaries and the property
casualty companies. The primary sources of revenues for this segment are premiums, fees, and charges that the Company
receives to assume insurance-related risk. The Company earns net investment income on invested assets supporting
insurance reserves and capital supporting the business. The Company also receives fees based on the level of assets
supporting VUL separate account balances. This segment earns intersegment revenues from fees paid by the Asset
Management segment for marketing support and other services provided in connection with the availability of RiverSource
Variable Series Trust, Columbia Funds Variable Insurance Trust, Columbia Funds Variable Insurance Trust I and Wanger
Advisors Trust funds under the VUL contracts. Intersegment expenses for this segment include distribution expenses for
services provided by the Advice & Wealth Management segment, as well as expenses for investment management services
provided by the Asset Management segment.
The Corporate & Other segment consists of net investment income or loss on corporate level assets, including excess
capital held in the Company’s subsidiaries and other unallocated equity and other revenues as well as unallocated
corporate expenses. The Corporate & Other segment also includes revenues and expenses of consolidated investment
entities.
The accounting policies of the segments are the same as those of the Company, except for the method of capital
allocation and the accounting for gains (losses) from intercompany revenues and expenses, which are eliminated in
consolidation.
The following is a summary of assets by segment:
December 31,
2011 2010
(in millions)
Advice & Wealth Management $ 12,293 $ 11,241
Asset Management 6,863 7,854
Annuities 87,266 84,836
Protection 18,915 18,571
Corporate & Other 8,649 8,539
Assets held for sale — 173
Total assets $ 133,986 $ 131,214
163